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Photo: Beacon's Closet
Photo: Beacon's Closet

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Beacon's Closet, Buffalo Exchange, and the Big Business of Selling Your Old Clothes

Why secondhand stores are booming.

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One recent New York City morning, Justin Goellner, a manager at the Chelsea location of buy-sell-trade store Buffalo Exchange, is foraging through the tote bag of a recent Sarah Lawrence graduate to determine which items he’ll buy from her.

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"These guys look a little too beat up for us," he says, scrutinizing a pair of metallic Calvin Klein pumps that are practically melting at the heel, "but I hope you had an awesome night out in them!"

Rummaging deeper, Goellner pulls out a pleather moto jacket and prices it at $15. "These are always such great sellers," he whispers. He quickly passes on pilled grandpa sweaters ("not the right season"), H&M smock dresses ("meh"), and striped Brandy Melville tees ("Hey, it’s our old friend!") like he’s being guided by a sixth sense. Eventually, he settles on a few other pieces, including a silk blouse from Banana Republic ("This is exactly what cute fashion office ladies want") and a long crocheted vest from Urban Outfitters ("Good for a festival outfit," he winks).

Once Goellner gets to the bottom of the bag, he informs his customer she’s done really well and explains how Buffalo Exchange, like most buy-sell-trade stores, work: you get 50 percent of the sale in store credit or 30 percent in cash.

A buyer at a Buffalo Exchange location in Bellingham, WA. Photo: Buffalo Exchange

"We’re selling your items for $139.50, so that gives you $69.75 in store credit or $41.85 in cash!" he exclaims. The face of the graduate, a curly-haired brunette, immediately drops upon hearing the little profit she’s left with. She hesitates for a second before settling for store credit. Once she’s out of earshot, Goellner admits that most Buffalo Exchange customers don't fully grasp the buy-sell-trade process.

"It’s hard for people to understand the value of their own stuff."

"People think, ‘Oh, I can get money for my old clothes!’" he says. "They aren’t thinking that if it's all stuff they would just donate, we aren’t going to buy it. It’s hard for people to understand the value of their own stuff. A lot of times, people think their items are worth more than they actually are."

The average shopper might not know the true value of their old clothing, but the buyers who assess the dregs of those shoppers' closets certainly do. Secondhand selling is a $16 billion industry, one that grows at a steady rate of 6 percent each year, according to PrivCo. With national chains like Buffalo Exchange and Crossroads Company swiftly expanding over the last decade, and New York-based franchise Beacon’s Closet having quadrupled its locations since it arrived on the scene in 1997, the market has been flourishing by employing a business model that manages to make money off sloppy seconds.

American thrift stores have been around for over a hundred years, with Goodwill and the Salvation Army opening their first stores at the turn of the last century. Secondhand shopping was particularly popular during the late '60s and early '70s, notes British cultural theorist Angela McRobbie in her book Postmodernism and Popular Culture, where she spends an entire chapter explaining how "ragmarkets" should be seriously considered when examining the counterculture era because "there is more to buying and selling subcultural style than the simple exchange of cash for goods."

Inside a Crossroads Trading Company store. Photo: Patricia Chang

Today, high-end vintage and consignment shops can be found in major shopping cities like New York and Los Angeles, while stores like Buffalo Exchange and Crossroads proliferate across the country, bringing in millions in revenue by catering to mall brands. These stores resonate with shoppers because they buy clothing for cash, as well as stock low-priced items for sale. They've become staple retail spots for regular shoppers, not just bargain hunters.

The secondhand market is experiencing a rise in popularity that first became noticeable during the recession, notes Adele Meyer, executive director of NARTS, a Michigan-based association for resale professionals. Buffalo Exchange’s revenue, for example, climbed from $64.4 million in 2010 to $90.4 million in 2013, according to PrivCo; they enjoyed a profit at a time when retail giants like Gap were taking a significant hit.

"Even though the economy is better now, the excitement of saving money and hunting for treasures still lingers."

"The economic downturn was met with this market’s numbers going up and up," notes Meyer. "Since then, people are always looking for ways to save and make money. Even though the economy is better now, the excitement of saving money and hunting for treasures still lingers."

Ellen Range, a 68-year-old Kew Gardens resident, says she’s been shopping at Buffalo Exchange in recent years because her "funds are low for fashion and I know I can count on the store to buy whatever I need without spending too much." She also notes that the location she frequents is now "flooded with tons of tatted people."

Buffalo Exchange began with one store in Tucson, Arizona in 1974; it now has 49 outposts across the country. Similarly, Crossroads started out with a single location in San Francisco in 1991. It has since grown to include 32 stores from coast to coast, and as of 2012 was bringing in an annual revenue of $21 million.

The growth of secondhand shopping isn’t only happening in brick-and-mortar stores, though. E-commerce sites backed by venture capital firms are also making their mark, notes PrivCo analyst Radek Jagielski. PoshMark has raised $40.5 million in funding since 2011 and was on pace to hit $100 million in annual revenue in December, while The RealReal has raised $83 million and is believed to have brought in $125 million in its last fiscal year. Tradesy, yet another secondhand site, has raised $44.5 million since 2012.

A recent assortment from Buffalo Exchange. Photo: Buffalo Exchange

The boom in the secondhand market not only dovetails with the ascent of the cost-aware shopper, but also a move toward consumer consciousness. Though fast fashion is still a visibly growing segment, shoppers have also become more aware of its environmental and social impact.

"We continue to produce because people like new and shiny stuff. I used to be like that when I was younger—shopping all the time only to discard it all," says Megan McCombs, a 27-year-old South Williamsburg resident in Crossroads. "But there was a big shift in my life when I began to lean away from that. Now I try to wear clothes through, and even then I try to sell them back. I don’t think I’ve bought anything new in the past three years."

Secondhand stores are also perfect for the shopper at the opposite end of the spectrum from McCombs. "I have this thing where I wear my favorites and have these other items that I wear once or twice and then just keep in my closet," says Pace University student Allison Soden, who’s cleaning out her closet ahead of summer break. "I realize that pattern, so I’m trying to get rid of that habit by selling my clothes."

Katrina Feil, a 25-year-old manager at Beacon’s Closet in Manhattan’s Greenwich Village, adds that online shopping has also increased the popularity of secondhand chains. These days, Feil’s store has its own section for online-only brands.

Jackets behind the counter at Crossroads. Photo: Patricia Chang

"We’re seeing dozens of items from Nasty Gal and ASOS every day, and usually they are new with tags!" Feil says. "People are always buying things online that don’t fit, or they will miss the window of return and are stuck with the clothing, so they sell them here. We capitalize on that because pieces from a store like ASOS might not be better quality than pieces from other stores, but they are definitely fast-sellers."

As Jacqueline Siegel, a shopper from New Jersey puts it, "You come in here with clothing and you literally have no idea what is going to happen! Sometimes they take things you’d never expect and other times they’ll pass on items you consider first-rate."

While the eclectic workforce of secondhand buyers like to say there’s no definitive way to explain what it is they're looking for—Goellner likens his job to "an art, not a science"—if you spend enough time with them, you begin to understand how their systems work.

Goellner likens his job to "an art, not a science."

Take Buffalo Exchange. Before each of his buying sessions one Wednesday morning, Goellner explains to customers that he’s going to examine the items they've brought in based on their "styles, cuts, and colors."

"We’re going after current trends, so it’s a combination of what is currently selling at a retail store and here," he adds.

Buffalo Exchange also has its eye out for what's going to sell quickly, since they only keep items on the sales floor for about a month. This can mean passing on pieces that are too popular. "A lot of the times, with the Zara stuff, you see it so frequently because it’s so inexpensive," Goellner explains. "We try to stay away from it." Otherwise, you run the risk of repeat items going unsold.

Shoppers at a Buffalo Exchange in Denver. Photo: Getty Images

Goellner also notes that Buffalo Exchange doesn’t typically buy brands that are cheap to begin with. Buyers will take a look at items to see if they're special, but will usually end up turning down pieces from Forever 21, H&M, and Old Navy. Not only can they not make a ton of money off these brands, but "clothing that starts out really affordable is going to wash out right away and probably won’t last."

Instead, Goellner looks for trend pieces from stores like Gap, Urban Outfitters, Ann Taylor, and J.Crew—though brand is the last thing he takes into account. Buffalo Exchange is also keen to take note of what’s selling (fringe, distressed jean, fit-and-flare dresses, and crop tops are driving interest right now), so its buyers can seek out those pieces, no matter their brand or season.

Buyers at secondhand stores are given an extensive education in how and what it is they should look for in inventory.

"The big thing we look for is people who are excited about clothing," says Goellner of the chain's buyers. "This is a job where you’re going to be with clothing all day, so it needs to make you happy. We also look for people who love to shop—not necessarily those who buy everything, but people who like to look and get excited."

Buyers at secondhand stores are given an extensive education in how and what it is they should look for in inventory. These aren't simple sales positions, but rather full-fledged fashion jobs (Broad City's Abbi and Ilana would surely agree). Buyers at Buffalo Exchange take turns producing trend reports every two weeks, detailing which items are selling well, both in secondhand stores and at full-priced retail shops. At monthly meetings, Goellner adds, buyers indicate which items are staying on the floor because "that is usually an indicator that a specific trend is slowing down."

Crossroads also chases trends, though it shies away from older pieces. Jake Biddlecome, a buyer at the brand’s Williamsburg outpost, explains that his average shopper is extremely educated about what’s in stores, so Crossroads can’t afford to buy anything that’s dated. When a middle-aged teacher recently came to his store looking to sell an entire suitcase filled with old White House Black Market, Nordstrom, and Barneys clothing, Biddlecome turned almost all of it down, even though the customer was selling in-style items like maxi dresses and flared jeans.

Shoes at Beacon's Closet. Photo: Beacon's Closet

"If an item is over three or four years old, it’ll be harder to sell for us, and if it’s six or seven years old, we won’t be able to sell it at all," says Biddlecome. "We’re much better off holding out until we get better pieces. We’re only going to buy things that are current."

Crossroads's corporate office in Berkeley determines which items the brand will look for that season. At the Williamsburg store earlier this month, postcards at the register featured a detailed list of what the store was buying for spring (trapeze dresses, Chelsea boots, floral prints, blush tones, safari pieces), while its website recently put up a summer hunt agenda (polka dots, boat shoes, nautical striped pieces, minimal sneakers, statement handbags).

Unlike Buffalo Exchange, Crossroads doesn't turn away inexpensive brands. "We don’t completely eradicate a label, even if it’s a cheap company, because if it’s a really current Forever 21 piece, someone is going to buy it," says Biddlecome. "We just price those items for lower and know that our customer would buy it, especially because Forever 21 rips everyone off anyways, so you know you’re still getting the trend!"

The brands that Crossroads pays special attention to depend on neighborhood, Biddlecome explains. Its Brooklyn location leans more towards "street fashion" and its customers are always thirsty for local favorites like Madewell and Rachel Comey. The store is also a hotbed for tourists, so the store cycles through contemporary pieces from international favorites like Sandro and All Saints.

Beacon’s Closet, on the other hand, buys mostly higher-end designer items. On a recent weekday afternoon, the store’s racks are overflowing with affordable Diane von Furstenberg, Rodarte, Alexander Wang, Rag & Bone, Anna Sui, and Loeffler Randall. The store, like Buffalo Exchange, will not buy items from H&M or Forever 21, although Feil says buyers will sometimes purchase mid-range brands if the item is particularly current.

Photo: Buffalo Exchange

"We mostly look for designer stuff because it sells really well. People are always looking for designer items while on a budget, which is what we're best at," she says. "But we do look for the occasional good piece from Banana and J.Crew."

Beacon's Closet founder Carrie Peterson even has her employees do some detective work. "We ask buyers to go out seasonally and sleuth-shop at NYC stores from which we see a lot of inventory," she says. "They fill out questionnaires about trends they notice and pricing. We also do morning meetings and biannual trend meetings to be sure we're up on everything that's coming down the runways, as this has a trickle-down effect across all high and low-end brands. Our customers are pretty fashion-conscious and expect the same of us."

"Collectible items like special sneakers might be great for a niche customer, but technically, there’s nothing special about them."

How buyers price items similarly varies. Peterson says her company shoots for 20 to 30 percent of retail price. Stores are stocked with giant binders of spreadsheets that list the original prices of popular items ("Rag & Bone jeans: $269-$347" "Alexander Wang dress: $895"), along with preprinted price tags, though buyers will come up with their own prices when unique pieces come in.

Over at Buffalo Exchange, Goellner says the store doesn’t have an exact price formula, but notes that buyers aim to have everything stay in an affordable window because "the store is supposed to feel like you are always getting a good deal."

"Everything in the store needs to make sense to a shopper," he explains, moments after he hands a pair of vintage Fred Perry sneakers back to its owner. He's priced them at $28.50, but the owner of said sneakers, a handsome skater, takes them back because they're going for over $300 on eBay. "Collectible items like special sneakers might be great for a niche customer, but technically, there’s nothing special about them. I can’t price them higher than, let’s say, a leather Frye boot because that’s not our model."

The Beacon's Closet Manhattan location. Photo: Beacon's Closet

Crossroads runs a much tighter ship when it comes to pricing. Its buyers break clothing into four categories: basics (items from brands like H&M and Forever) sell for $9.50 to $12.50, bread and butter (Topshop, Zara) sells for $16.50 to $25, bridge ("nicer pieces, maybe made of leather," Biddlecomb explains) sells for $32 to $37, and designer items sell for $47 to $65.

Consignment shops certainly give sellers a shot at making more money, but Beacon’s Feil notes that people unload their clothes at buy-sell-trade stores because they want quick cash. She adds that her Beacon’s Closet location is at its most jam-packed on the first and last days of the month, when New Yorkers are trying to scrape together enough for rent. It’s not uncommon to see these shoppers again a few days later trying to buy back their beloved designer goods.

Quick cash, fast-sellers: It's clear that, ultimately, the secondhand market is about one thing—speed.

"If you bought a good piece, wore it twice, and aren’t sure if you’re going to wear it again, just sell it back quickly! Don’t hold it," Goellner says. "In this regard, clothing is similar to cars: the second you buy it and drive it off that lot, it will lose its value."

Editor: Julia Rubin


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